Diamond Offshore Drilling

"Diamond Offshore’s roots", according to the company's website, "date back to May 1953, when Alden J. (Doc) Laborde founded Ocean Drilling and Exploration Co. (ODECO) in New Orleans. Laborde had designed what was probably the first submersible drilling rig. After finding a financial backer in Charlie Murphy of Murphy Oil Co., a grateful Laborde built the rig in 1954 and named the unit Mr. Charlie in honor of his benefactor. ...

"The fledgling company formed an offshore exploration company, Zapata Off-Shore Co., in 1954, with Bush as its president. The company split in 1959 into Zapata Petroleum (headed by the Liedtke brothers and later to become a part of Pennzoil) and Zapata Off-Shore (headed by Bush). The offshore company’s name was changed to Zapata Corp. in 1982, and it was purchased by Arethusa (Offshore) Ltd. in the early 1990s.

"In the early 1960s, an onshore drilling company, Brewster-Bartle, went bankrupt. The banks that had become the owners of the company’s rigs contacted Don McMahon, a Texas rancher and oil man, and asked him to take over the failed company. McMahon accepted the challenge and formed Diamond M Drilling Co. in 1964. He named the company after Diamond M Acres, his ranch near Simonton, Texas.

"McMahon took his company public in 1970 and expanded into offshore waters with the building and purchase of jack-up, barge, and semisubmersible rigs. In the early 1970s, Diamond M was one of the largest owners of barge rigs in the energy industry. The company continued to drill both on land and offshore.

"In the late 1970s, Western Oceanic tendered an offer to buy Diamond M. Unwilling to be purchased, Diamond sought and found a “white knight” in Kaneb Services, Inc.

"After the oil collapse of the 1980s, Kaneb was fighting bankruptcy. Jim Tisch of Loews Corp., New York, (a diversified holding company) had been buying drilling rigs at distress prices. He approached Diamond M’s president, Bob Rose, in 1989 with an offer to buy a rig. Rose instead suggested that Tisch buy substantially all of the company’s assets, which Tisch did.

"In an opportunistic transaction in 1992, Diamond M Corporation, under Loews' ownership, purchased all of the outstanding stock of ODECO Drilling Inc. from ODECO Oil and Gas Co., a subsidiary of Murphy Oil. Through the transaction, Diamond M acquired a total of 39 rigs – almost half of which remain in our fleet today. Among the 39 rigs were 19 semisubmersibles, 14 jack-ups, one drillship, three platform units and two submersibles. [Note: Diamond acquired only a 50 percent leasehold interest in the Ocean Alliance] The total price was approximately $372 million, roughly half the cost of a single new-build deepwater semisubmersible today. Shortly thereafter, Diamond M Corp. briefly changed its name to Diamond M-ODECO Drilling Inc. before becoming Diamond Offshore Drilling, Inc., in 1993.

"Until October 1995, Diamond Offshore remained a wholly owned subsidiary of Loews Corp. Then Loews sold 30 percent of the company in an initial public offering, and Diamond Offshore began trading on the New York Stock Exchange under the ticker symbol “DO.”

"In April 1996, Diamond Offshore acquired Arethusa (Offshore) Ltd. (including eight semisubmersibles and three jack-up rigs) with stock, reducing Loews’ ownership in the company to 54 percent. Since that time, Loews’ share in the company has remained constant, and the remaining public shares have been reduced through stock buybacks. In December 1996, Diamond Offshore sold its land division, Diamond M Onshore, to DI Industries, Inc." [1]